New World Bank Project to Increase Regional Transport Connectivity in Central Asia

WASHINGTON, April 22, 2014 – The World Bank Group’s Board of Executive Directors today approved an allocation of US$45 million equivalent to finance the first phase of the transformative Central Asia Roads Links Program, to be implemented in the Kyrgyz Republic in 2014-2019.

The Central Asia Road Links (CARs) program is a collaborative regional, multi-phase program initiated by governments of Central Asia. The objective of this program is to increase transport connectivity between neighboring countries in Central Asia while supporting improvements in road operations and maintenance practices.

The first phase of the Central Asia Road Links Program (CARs-1) will rehabilitate cross-border road links between Osh and Batken oblasts in the Kyrgyz Republic and Sugd oblast in the Republic of Tajikistan.

“Road transport in the Kyrgyz Republic carries 95 percent of all passenger movements and 60 percent of all freight traffic, so improving the road links to neighboring countries will greatly improve local peoples’ and business’ access to markets for goods and services,” said Alexander Kremer, World Bank Country Manager in the Kyrgyz Republic. “

We are pleased that the Kyrgyz Government is taking advantage of opportunities to invest in multi-country programs.”CARs-1 in the Kyrgyz Republic will focus on the rehabilitation of about 56 kilometers of road sections in Batken oblast along and within close vicinity of the Osh-Batken-Isfana road corridor. Specifically, those road sections include: Isfana – Kairagach/Madaniyat border crossing (36 kilometers), Batken- Tortkul (14 kilometers), and Batken – Kyzyl Bel/Guliston border crossing (6 kilometers).

Another important goal of the CARS-1 project will be the improvement of road operations and maintenance by the Osh-Batken-Isfana Roads Department, which will be responsible for routine maintenance and emergency works for the entire Osh-Batken-Isfana corridor. The project will support the Department and its local maintenance units through a set of equipment worth US$1 million as well as training covering best international road maintenance practices. In addition, the project will help the Kyrgyz Ministry of Transport and Communication to review regional norms and standards on vehicle weight, axle load limits and tariffication, as well as develop a strategic plan for the institutional arrangements for transport control.

It is estimated that the project will directly benefit about 680,000 residents of Batken and Osh oblasts who are expected to be regular road users travelling along the road sections. Indirectly, the improved connectivity will benefit more than three million residents of the Kyrgyz Republic and Tajikistan.

“The CARS-1 project is designed as part of asequence of projects with multiple countries. Not all participating countries would need to start at the same time, but rather each would begin when ready,” said Cordula Rastogi, World Bank’s Senior Transport Economist and Task Team Leader for the CARs project. “The proposed second phase in this program involving Tajikistan is currently under preparation. Kazakhstan has expressed its interest to consider its participation in the program in the future; discussions are currently ongoing between the Kyrgyz and Kazakh governments with a view to increase transport connectivity between Issyk-Kul oblast (Kyrgyz Republic) and the bordering Almaty oblast of Kazakhstan.”

The CARs-1 project will be implemented over five years by the Kyrgyz Ministry of Transport and Communication. The World Bank’s total contribution of US$45 million equivalent consists of US$36.8 million equivalent provided as a highly concessional credit, and US$8.2 million equivalent as a grant. The Kyrgyz Republic’s own contribution will be US$9 million.

It is worth noting that the World Bank provides additional resources to the countries who undertake projects in cooperation with other countries in the region. This year the Kyrgyz Republic received a bonus top-up of US $ 54.5 million equivalent from the World Bank to invest in CARs-1 and CASA-1000 projects.

The World Bank’s overall mission in the Kyrgyz Republic is to reduce poverty, promote economic growth and shared prosperity. 45 percent of the World Bank’s assistance to the Kyrgyz Republic is in the form of grants. The other 55 percent is in highly concessional credits – no interest, and only a 0.75 percent service charge. Credits are repayable in 40 years, including a 10-year grace period, while grants require no repayment. The financial assistance to the Kyrgyz Republic since 1992 amounts to over US$1 billion.